Weekly Purcell Agricultural Commodity Market Report Wayne D. Purcell Agricultural and Applied Economics Virginia Tech

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In hogs, the weighted average price in the major trading areas closed the week above $60. That has given a boost to the expiring February contract, and it has recorded new highs and reached the $64 level.

If this cash market continues to hold at relatively strong levels and the February starts to go off the board with some strength, we will probably see the April contract challenge the high at $61.55 that occurred February 9.

If we reach that level, we may then see a challenge of the $62.40 level which occurred on October 15. I would be aggressive in pricing March and April hogs on a rally to the $61.55 to $62.40 range by the April.

There is an obvious trend line on this market that hooks the lows from back in late December to the lows in late January. A resistance plane across that extreme high at $62.40 which occurred on October 15 and this uptrend line captures this market in a triangle, and we need to be selling rallies up toward the highs.

The more conservative trader, who is less likely to be trading on a selective hedging basis and to be willing to buy back the short hedges on a price dip, might want to wait and get these hogs forward priced when we see a close below the uptrend line on the April contract.